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Where do I find my tax code and what is it?

Where do I find my tax code and what is it?

Your tax code is used by your employer or pension provider to work out how much Income Tax you need to pay. It is a code supplied to your employer or pension provider by HMRC calculated to show how much tax-free income you get in that tax year. The letter refers to your Personal Allowance situation.

1185L is the tax code currently used for most people who have one job or pension. This is how it is formulated below:.

  1. HMRC works out your tax-free Personal Allowance.
  2. HMRC then add up any income that you haven’t paid tax on and the value of any benefits from your job, such as a company car etc
  3. This un-taxed income is then taken away from your Personal Allowance. What’s left is the tax-free income you’re allowed in a tax year.

 

Letters in your tax code refer to your situation and how it affects your Personal Allowance:

   
L You’re entitled to the standard tax-free Personal Allowance
M Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance
N Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner
T Your tax code includes other calculations to work out your Personal Allowance, for example it’s been reduced because your estimated annual income is more than £100,000
0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
BR All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
D0 All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
D1 All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
NT You’re not paying any tax on this income
S Your income or pension is taxed using the rates in Scotland
S0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
SBR All your income from this job or pension is taxed at the basic rate in Scotland (usually used if you’ve got more than one job or pension)
SD0 All your income from this job or pension is taxed at the intermediate rate in Scotland (usually used if you’ve got more than one job or pension)
SD1 All your income from this job or pension is taxed at the higher rate in Scotland (usually used if you’ve got more than one job or pension)
SD2 All your income from this job or pension is taxed at the top rate in Scotland (usually used if you’ve got more than one job or pension)

If your tax code has ‘W1’ or ‘M1’ at the end it is an emergency tax code.  If there is a ‘K’ at the beginning it means you have income that isn’t being taxed which is more than your tax-free allowance. This might happen if you are paying tax you owe from a previous year or you are getting benefits that you need to pay tax on.

If you think your income tax may be incorrect you can check your Income Tax online.